UPDATE 1-Canada's Flaherty says G7 did not mean to target Japan

Reuters Staff

2 Min Read

* Flaherty says G7 made “consensus statement”

* Says Japan not singled out by G7 statement

OTTAWA, Feb 13 (Reuters) - A Group of Seven statement designed to cool international currency tensions was a consensus effort and not meant to single out Japan, Canadian Finance Minister Jim Flaherty said on Wednesday.

Asked if the statement, issued on Tuesday, meant to single out Japan, he answered, “No. It was a consensus statement by the members of the G7, the finance ministers and the governors ... expressing our concern about exchange rates.”

Reporters repeated the question and he again replied that Japan was not the target.

In the statement, the G7 declared that fiscal and monetary policies would not be directed at devaluing currencies - an attempt by the G7 to soothe market nerves that Tokyo was aiming to guide the yen lower with its aggressive loosening of monetary policy.

But contradictory statements by various G7 officials about the intent of the message only led to more market volatility, with Japan saying the statement gave it a green light to continue with its efforts and another unnamed G7 official saying the statement was aimed squarely at Tokyo.

Canadians have been careful not to judge Japan’s policy shift. A senior Canadian finance official refused on Tuesday to comment on whether the G7 message was aimed at Japan or whether Ottawa was concerned about yen volatility.

Bank of Canada Governor Mark Carney said on Tuesday monetary policy will inevitably have consequences for exchange rates but said Japan has agreed to acknowledge that monetary policy is focused on domestic outcomes, not the exchange rate.